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Newfangled Aggregator Trapit Hires an Old-Timer: Yahoo Editor Liz Lufkin

Peter Kafka — Tue, 17 Apr 2012 13:01:41 +0000

Liz Lufkin used to have a big say about what most of the Internet read. Now she wants to do it again.

The difference is that at Lufkin’s last job, running the home page for Yahoo, she helped shape the daily media diet for hundreds of millions of people a month. Now she’s chief content officer at Trapit, a recently launched news aggregator that attracts some 25,000 visitors a day.

Trapit is tiny, but the real challenge for Lufkin and the start-up isn’t the company’s size. It’s the competition: There are roughly one gazillion services that say they will filter the Internet’s endless waves of stories into something personalized and manageable. Some, like Google news, use unfathomable algorithms; others, like News.me, say they do it using social cues from your Twitter and Facebook feeds.

Trapit’s pitch, essentially, is that it does a better job than the rest because it is built on the bones of a DARPA-funded artificial technology project. It says it isn’t interested in the social Web but the real-time Web, and in the way individual users respond to the stories it serves up, so it can get better at predicting their tastes over time.

I don’t have any way to vet those claims based on my brief demos of the site (above, the top results for “greek yogurt,” in case Dick Costolo is interested). But I can note that hiring Lufkin to help sort and display content is an acknowledgment that even the smartest computers need an assist or two.

In addition to her editorial work, Lufkin is also supposed to help Trapit build a business. Right now, the company simply points users to publishers’ original stories (surrounded by a framebar) and there’s no revenue in that. But Lufkin and Amra Tareen, the site’s new biz dev head, are supposed to go out and create partnerships with publishers so that Trapit could help them sell subscriptions or a la carte articles.

It’d be great if they could get a couple of those deals hammered out in the next month or so, when Trapit’s new iPad app is supposed to launch. But Lufkin and Tareen just started at Trapit this month, and if you’re betting on publishers to move quickly, you’ll lose lots of money, fast. Best to give this one some time.

Exclusive: Groupon's Mason Tells Troops in Feisty Internal Memo: "It Looks Good."

Kara Swisher — Thu, 25 Aug 2011 22:02:13 +0000

Facing a barrage of negative press about its upcoming IPO, Groupon CEO and co-founder Andrew Mason took up a pen to counter critics of the social buying service.

Especially under scrutiny has been the Chicago-based Groupon’s accounting of its finances — along with worries that its torrid growth is slowing — both of which Mason addressed in detail in a pugnacious email memo to his thousands of employees.

Specifically referencing a recent article speculating that the daily deals site was running out of money, Mason said, in part:

“While we’ve bitten our tongues and allowed insane accusations (like in the article above) to go unchallenged publicly, it’s important to me that you have the context necessary to brush this stuff off.”

Mason also took on the controversial ACSOI — or adjusted consolidated segment operating income — metric that Groupon used in its initial filing and later stepped back from.

“The reason we didn’t realize everyone in the world would hate ACSOI (no, it’s not the same reason we didn’t realize everyone in the world would hate our Superbowl ad), is that we think it actually does a pretty good job at describing our marketing expenses in a steady state — we just didn’t realize there would be so many skeptics,” wrote Mason.

Mason also took some aim at competitors, such as LivingSocial and Yelp, in the email.

As for the public offering, which is expected next month:

“If there’s a silver lining, it’s that we’re almost on the other side, and the negativity leaves us well-positioned to exceed expectations with an IPO baby that, having seen the ultrasound, I can promise you is not one of those uglies.”

Then again, that is exactly what a dad-to-be would say about his baby, whatever it looked like.

Mason, when asked about the memo, declined to comment.

There is a lot more than that, so here’s Mason’s full email for all you pencil pushers to peruse:

Dear Groupon,

This weekend, I did a Google News search on our company — my first in awhile. The first story that popped up was called The Fall of Groupon: Is the Daily Deals Site Running Out of Cash? I laughed when I read the headline (in the car by myself, weirdly). First — with this article, the degree to which we’re getting the shit kicked out of us in the press had finally crossed the threshold from “annoying” to “hilarious.” Second, I was struck by the irony — I had just finished a board meeting last Wednesday saying this to myself: I’ve never been more confident and excited about the future of our business.

I realize that this sounds like the kind of thing that CEOs say when they’re trying to pep people up. First of all — I’m all about not pepping people up. If you don’t believe me, just ask my fiancée, Jenny “why don’t you ever say anything nice about me” Gillespie. Want another example? Look at the magazine covers in our lobby, which are there to make you sad by reminding you of the impermanence of success.

I’m going to spend the rest of this email explaining why I’m so excited. You need some ammo to argue back against your blog-reading “friends” (silently argue in your mind, that is — you can’t actually say any of this yet), and I’ve been told that the “what have you ever done with your life that’s so great?” rebuttal isn’t working as well for you guys as it has for me.

While we’ve bitten our tongues and allowed insane accusations (like in the article above) to go unchallenged publicly, it’s important to me that you have the context necessary to brush this stuff off.

I’ll summarize my excitement with four points: 1) Growth in our core business is strong 2) Our investments in the future — businesses like Getaways & NOW — look great, 3) We are pulling away from competition, and 4) We’ve built a great team that I would pit against anyone. In other words, all the stuff that one would want to look good? It looks good.

Many of the long-term unknowns of our business are becoming known, and we like the answers. I will now elaborate in a level of financial detail that will give Jason Child a stomach ulcer.

1. GROWTH IN THE CORE BUSINESS

Thanks to a tremendous effort by our sales team, August in the U.S. is shaping up to be a pivotal month. It appears that will revenues grow by about 12% over last month (which is a lot), while we cut our marketing expenses by 20% in the same period.

Beyond their obvious goodness, these numbers are important because they answer one of the main criticisms thrown at us in the past few months, relating to a metric we put in the S-1 called ACSOI (adjusted consolidated segment operating income) to help people understand how we think about marketing expenses. The reason everyone in the world seems to hate ACSOI is that it makes us look magically profitable by subtracting a bunch of our customer acquisition marketing costs from our expenses. The reason we didn’t realize everyone in the world would hate ACSOI (no, it’s not the same reason we didn’t realize everyone in the world would hate our Superbowl ad), is that we think it actually does a pretty good job at describing our marketing expenses in a steady state –we just didn’t realize there would be so many skeptics. I think it’s worth going deep on this one more time — brace yourself.

Our internal forecast shows two different types of marketing: what I’ll call “normal marketing” — which is NOT excluded from ACSOI — and “customer acquisition marketing,” which is. The way Groupon spends on marketing is unique in three ways:

1. We are currently spending more than just about any company ever on marketing — in Q2, we spent nearly 20% of our net revenue on marketing, while a typical company spends less than 5%. Why do we spend so much? The simple answer is “because it works.” But thats only part of what makes our situation special.

2. Our marketing — at least the customer acquisition marketing that we remove from ACSOI — is designed to add people to our own long-term marketing channel — our daily email list. Once we have a customer’s email, we can continually market to them at no additional cost. Compare this to Johnson and Johnson, McDonald’s, or most other companies. If I’m a Johnson, and I’m trying to sell you a box of Band Aids, I have to keep spending money on commercials and magazine ads and stuff to remind you about how sweet Band Aids are, even after you’ve bought your first box. With Groupon, we just spend money one time to get you on our email list, and then every day we email you a reminder of the sweetness of our metaphorical Band Aid. There is no cost of reacquisition — that’s unusual (and we created ACSOI to point that out). If Johnson wanted to follow the Groupon strategy, he would have to start a free daily newspaper about bandages and then run Band Aid ads in it every day.

3. Eventually, we’ll ramp down marketing just as fast as we ramped it up, reducing the customer acquisition part of our marketing expenses (the piece that we remove in ACSOI) to nominal levels. We are spending a ton now because we’re acquiring as many subscribers as we can as quickly as we can. We aren’t paying attention to marketing budget (just marketing ROI) in the way a normal company would, because we know that even if we wanted to continue to spend at these levels, we would eventually run out of new subscribers to acquire. So our customer acquisition spend drops severely to reflect the fact that eventually we’ll run out of people we can add to our email list. We view this internally as a very large one-time expense and then our job forever after will be to continually convert these subscribers into customers and to make sure our customers keep buying from us. Ongoing, the normal marketing dollars we spend are not something we would remove from our internal calculation of ACSOI.

I tried my best to explain this simply, but it’s not lost on me that if you actually understood this, you probably had to read it three times. It’s not easy stuff. It’s much easier to assume that we’re goons. So people can be forgiven for being suspicious. In fact, feel a little bad about how downhearted the critics will be when we don’t turn out to be a Ponzi scheme — those are good impulses for journalists to have, and I hope our non-evil ways don’t destroy their spirits.

Anyway, there’s a reason that I just went on about ACSOI. One of the questions that skeptics ask is, “when you ramp down marketing, won’t revenues stop growing as well? Aren’t you just buying growth?” Over the past several months we’ve been consistently reducing our marketing spend and yet revenues are still increasing at a significant pace. In Q1 of this year, marketing represented 32.3% of our net revenues. By the end of Q2 it had fallen to 19.4%. And it has continued to fall over the past several months all because we’ve been investing in our own long-term marketing channel — our email list.

Internationally we see the same trends — marketing is down, but revenues are up — every country is either losing less or making more. Even in young markets like Korea, where we’re still making massive investments, we’re seeing unprecedented growth. We started building our Korean team this January, despite the presence of two competitors that were larger than any we’d previously battled from behind. Thanks to the brilliant execution of the Korean team, we are set to be the market leader within months. We’ve never had a country grow as fast as Korea!

What about our joint-venture with Tencent in China? Did you read the article that Gaopeng’s CEO has kidnapped the first born children of all our employees and is putting them to work building a laser beam he’ll use to slice the moon in half? It turns out that that one isn’t true either. China is definitely a different market, but every month we inch closer to profitability. As has been our strategy in launching other countries — Germany, France, and the UK, included — our China growth strategy was to hire quickly and manage out the bottom performers. So far, that strategy has improved our competitive position in China from #3,000 to #8. Will we one day reach the dominant status we enjoy in most (come on, Switzerland!) other countries? It’s too soon to tell, but there’s no question in my mind that we’re building a business that will be around for the long haul.

2. NEW BUSINESS LINES ARE BOOMING

Travel and Product are enormous opportunities. After only a few months, they’re already making up 20% of revenue in some countries. We sold $2M worth of mattresses in the UK — in one day! Groupon Getaways will do $10M in its first calendar month — which you might think is awesome, but we’re actually disappointed with those results because we know how much better we’ll be doing soon.

While there’s still a ton of work to do, Groupon Now! continues to see weekly double digit growth. The model works and I believe it will play a major part in the future of our global business as more merchants and customers join the marketplace.

3. WE ARE PULLING AWAY FROM COMPETITION

If there’s a question I’ve received from Groupon skeptics more than any other, it’s, “how will you fend off the competition — especially massive companies like Google and Facebook?” I could give a dozen reasons to bet on Groupon, but it’s impossible to predict the future or the actions of others. Well, now the sleeping giants have woken up — and the numbers are showing that what was proven true with literally thousands of other competitors is just as true with the incumbents of the Internet: it’s kind of hard to build a Groupon. And since anyone with an Internet connection can track the performance of our competitors, I can be more specific:

Google Offers is small and not growing. In the three markets where we compete, we are 450% of their size.

Yelp is small and not growing. In the 15 markets where we compete, our daily deals are 500% of their size.

Living Social’s U.S. local business is about 1/3rd our size in revenue (and smaller in GP) and has shrunk relative to us in the last several months. This, in part, appears to be driving them toward short-sighted tactics to buy revenue, like buying gift certificates from national retailers at full price and then paying out of their own pocket to give the appearance of a 50% off deal. Our marketing team has tested this tactic enough to know that it’s generally a bad idea, and not a profitable form of customer acquisition.

Facebook sales are harder to track, but are even less significant at present.

My point is not that our competitors will fail — some may actually develop sustainable businesses, or even grow — after all, local commerce is an enormous market. The real point is that our business is a lot harder to build than people realize and our scale creates competitive advantages that even the largest technology companies are having trouble penetrating. And with the launch of NOW, I suspect our competition will have an even harder time in light of the natural barriers to entry that are needed to build a real-time local deals marketplace.

4. OUR TEAM

This is the fluffiest of the four points, but maybe the most important — we’ve built a global team of hungry entrepreneurial operators and seasoned executives that rivals any team I know of. Almost every day, I find myself in a scenario where I silently think, “I can’t believe I got this person to work for me — that failure of judgement is perhaps their single flaw.”

I point out the team because while today the business is strong and it appears we must endure success for awhile longer (despite its impermanence), we will inevitably be challenged with issues we didn’t predict — and when that happens, the quality of our team will be a deciding factor in our ultimate long-term success.

FINAL THOUGHTS

I wrote this email because when I read some of the press this weekend, I realized a rational person could read this stuff and wrongly conclude that we’re in trouble. The irony is hopefully clear: We’ve never been stronger.

And while we’ve refrained from defending ourselves publicly, you’ve continued to create our best defense, with every department innovating new practices that are taking our business to the next level. Thanks for staying tough, determined, and agile throughout this process. For now we must patiently and silently endure a bit more public criticism as we prepare to birth this IPO baby — a breed for which there are no epidurals. If there’s a silver lining, it’s that we’re almost on the other side, and the negativity leaves us well-positioned to exceed expectations with an IPO baby that, having seen the ultrasound, I can promise you is not one of those uglies.

I’ve been as candid as possible — hope this sheds some light on things. Reply with your questions if anything remains unclear. Amidst all this, I hope you remember what we’re doing here — we are making history together. I guess you don’t get to build something that reshapes the local commerce ecosytem without getting a few bruises. I’m so proud of the work we’re doing, and I feel extraordinarily lucky to work on what I think is the best thing that’s happened to small businesses since the telephone We’ve invented something that is catalyzing millions of dollars of local commerce every single day in 45 countries and fills the lives of millions of customers with unforgettable experiences — it’s pretty remarkable.

Looking forward to getting this behind us!

Andrew

P.S.: I almost forgot to address the nonsense about us running out of money in the article above. If you apply the same logic used in the article, you’d have concluded long ago that companies like Amazon and Wal-Mart were running out of cash too. Both have often had payables far in excess of their cash. Finance geeks call this a working capital deficit. It’s normal, manageable and a lot of folks actually believe it’s good thing and would kill to get paid from their customers long before they have to pay their suppliers. We are generating cash, not losing it — we generated $25M in cash last quarter alone, adding to the $200M we had before. In other words, we’re doing the opposite of running out of money.

Speaking of “it looks good,” here is Conan O’Brien with a Tourette’s version of Mason’s new catchphrase:

After Copiepresse "Boycott," Google Restores Search of News Sites

Liz Gannes — Mon, 18 Jul 2011 18:40:29 +0000

Google today stopped its so-called boycott of the Copiepresse newspapers (that had sued it) after they agreed not to enforce copyright infringement fines, but says it doesn’t plan to use such tactics as a matter of practice.

That’s the latest development in the long-running Google-Copiepresse copyright lawsuit — originally filed in 2006 — over the way newspaper content was handled by Google News.

After an appeals court in May upheld a Belgian court’s decision that Google violated Copiepresse copyright by including its newspapers’ stories in Google News, Google last week removed publications like La Capitale from both Google News and Google search in what the papers said was an act of retaliation.

But today, Google said it has gotten permission from Copiepresse to add its sites back to Google search results, and so it has.

The situation could have had far-reaching implications, by Google setting a precedent for excluding vertical content providers from search when they opted out of its more specialized services. Some wondered if providers like Yelp would be shut out of general search results for trying to limit Google’s use of their content in competing products like Google Places.

But Google today maintained that it wouldn’t be applying that pressure.

“It’s important to give Web masters control,” said Google spokesman Simon Morrison. “We wouldn’t demand that anyone include their content in any of our services at risk of being removed from search.”

Morrison said that Google removed Copiepresse from search results on Friday because, based on the latest ruling, it risked a fine of $25,000 per instance of copyright infringement.

Once Google received confirmation from Copiepresse that it would not enforce that penalty, and that it would also follow standard practices like robots.txt and metadata to exclude itself from crawling when desired, it restored the newspapers in search today, Morrison said.

Still, the whole situation seems a bit ominous, in that Google was willing to use the cutthroat tactic of removing the publications before they came to an agreement.

Want to Make Google News Smarter–Or Dumber? Give It a Shot.

Peter Kafka — Wed, 30 Jun 2010 21:01:02 +0000

Traditional publishers gripe that they don’t get enough love and respect from Google, and they want the search engine to favor their stuff above upstarts and aggregators. A new overhaul from Google News won’t give them that, but it does allow users to favor the MSM–or anyone else they want to: Google is giving users the ability to promote sources they’d like to see in the results and demote unworthy ones.

Google (GOOG) won’t let users completely excise sources from their feed, though. Ben Ling, director of product management for search properties, says you’ll still get news from a particular source if they’re the ones breaking news. So if you think the New York Times is a liberal fish-wrapper, or the Wall Street Journal is a propaganda tool for our corporate overlords, you’re still going to have live with them, sometimes. Don’t worry! It’s not that bad.

On the other hand, anyone savvy and/or motivated enough to spend time customizing the Google News page may not use Google News that much at all. Hardcore newshounds are probably glued to RSS feeds, and/or Twitter, Facebook, etc.

Still, worth playing with. The video below explains how to customize your page. and notes other new Google News features, including the obligatory social media links. Google calls it the biggest overhaul of the site since its launch in 2002. Search Engine Land gave its readers a preview of the overhaul last month.

Google Shutters Google.cn

John Paczkowski — Mon, 22 Mar 2010 19:08:03 +0000

Google has finally adopted the “New Approach to China” that it announced in January, making good on its threat to end censorship of its services in the country. Earlier today, the company begun redirecting Internet traffic away from its Chinese-language site at google.cn to google.com.hk in Hong Kong, beyond the so-called Great Firewall of China.

Searches that once would have been censored now return results, and the legend that once appeared at the bottom of the page–“According to local laws, regulations and policies, some search results are not shown.”–is no more.

David Drummond, Google’s chief legal officer, announced the move in a post to the company blog:

Earlier today we stopped censoring our search services–Google Search, Google News, and Google Images–on Google.cn. Users visiting Google.cn are now being redirected to Google.com.hk, where we are offering uncensored search in simplified Chinese, specifically designed for users in mainland China and delivered via our servers in Hong Kong. Users in Hong Kong will continue to receive their existing uncensored, traditional Chinese service, also from Google.com.hk. Due to the increased load on our Hong Kong servers and the complicated nature of these changes, users may see some slowdown in service or find some products temporarily inaccessible as we switch everything over….We believe this new approach of providing uncensored search in simplified Chinese from google.com.hk is a sensible solution to the challenges we’ve faced. We very much hope that the Chinese government respects our decision, though we are well aware that it could at any time block access to our services.

To that end, Google (GOOG) has established a page monitoring which of its services are available in China and which are blocked. As of this writing, access to quite a few are either partially or totally restricted.

Google stopped short of full withdrawal from the country. According to Drummond, the company will keep its operations in China, as long as it can anyway. Said Drummond: “We intend to continue R&D work in China and also to maintain a sales presence there, though the size of the sales team will obviously be partially dependent on the ability of mainland Chinese users to access Google.com.hk.

China and its state-run media, which were particularly vocal in advance of this latest move, haven’t yet commented on it beyond a simple acknowledgment that the redirect is in place.

PREVIOUSLY:

The Real Victims of the Newspaper Collapse

Peter Kafka — Fri, 19 Mar 2010 14:00:31 +0000

The Onion is on to something here. There’s something about big stacks of newspapers that appeals to a certain kind of person–I used to work with one of them, and actually, come to think of it, I kind of was one of them–and the creative destruction the Web has wrought has no upside for those folks.

You can’t build a wall around your cubicle using Google News and Craigslist.

Who's Going to Make Your News? And Who's Going to Pay Them?

Peter Kafka — Tue, 16 Feb 2010 15:00:43 +0000

Who’s going to bring you your news in a couple of years: The likes of the New York Times (NYT) and The Wall Street Journal? Or someone whose tweets have been picked up by Google News?

All of the above, likely.

If you want to see this question get hashed out at length, check out the video below, which features reps from the Times, the Journal, Google (GOOG) and AOL (AOL) back-and-forthing for an hour-plus.

Their chat was part of a day-long event hosted by the Paley Center in New York last week, which was ostensibly about journalism education. But this one was really about the same discussion everyone in journalism has whenever there’s a spare minute: “Holy cow! What just happened to our industry, and what are we going to do next?”

If you’re still working in the journalism industry, you may be hard pressed to find a spare hour to watch five guys talk about the future of the journalism industry. But! If you are so inclined, this one is pretty good.

And if you paid glancing attention to this thing while it was going on, via Twitter, it may be refreshing to watch it yourself. Because while it’s great for some stuff, Twitter can be pretty lousy way to cover a panel discussion.

It turns out, for instance, that when the WSJ’s Alan Murray referred to Google’s Josh Cohen as a “promiscuous parasite,” he was making a joke. Which wasn’t clear at all when this got repeated in the Twitterstream.

See for yourself:

AP Stories Reappear on Google News

Russell Adams — Wed, 10 Feb 2010 07:19:34 +0000

New articles from the Associated Press have quietly started rolling out on Google’s (GOOG) news site in the past hour, ending a nearly seven-week absence stemming from contentious negotiations between the two parties.

The AP and Google have been negotiating a new licensing agreement to continue the publication of AP content on Google News, but the AP’s efforts to more closely monitor the flow of articles to and through Google and other Web portals have hampered progress. The AP recently reached a new licensing agreement with Yahoo, though people familiar with the matter said the agreement did not include all the protections the AP was seeking.

Read the rest of this post on the original site

Project Alesia: News Corp.'s Roman Battle Cry–Does That Cast Googlers as the Gauls? (Plus Video!)

Kara Swisher — Wed, 23 Dec 2009 19:23:02 +0000

While Internet companies such as Google use baked goods as names for their key strategic initiatives–recent ones related to its Android mobile operating system were called Donut and Eclair, for example–aggressive media giant News Corp. is definitely not going for sweetness in its unusual selection of a code name for its high-profile digital content effort.

That would be Project Alesia, a moniker that comes from a vicious siege from ancient times widely considered to be one of the more decisive battles in history.

And that is apparently what top News Corp. (NWS) execs think is the best way to describe their plans for stopping the decimation of premium content in the digital age and transforming their business to take advantage of new means of distribution, according to numerous sources BoomTown spoke to this week about the unusual name.

“It takes a lot of determination to succeed in what is one of the biggest challenges newspaper and all media has ever faced,” explained one source. “So, the real path to success will require ingenuity and staying on course over time…which was critical to that military victory.”

Interestingly, said several sources, the Project Alesia name was picked by James Murdoch, chairman and CEO of Europe and Asia for News Corp.

Widely considered the heir apparent to his father, News Corp. Chairman and CEO Rupert Murdoch, James Murdoch is apparently a dedicated reader and student of Roman history.

But it has actually been the elder Murdoch who has been cast as the obvious general so far, conducting a recent series of public verbal attacks on Internet targets, especially Google (GOOG).

He has accused the search giant of “stealing” content, for example, while other News Corp. execs have echoed his gibes in various high-profile forums.

But James Murdoch has been a key player behind the scenes in the digital strategy, several sources said, an effort that also includes News Corp. Chief Digital Officer Jon Miller and Dow Jones CEO Les Hinton.

(Full disclosure: News Corp. unit Dow Jones owns this site.)

Of this top group, it is James Murdoch–who has slowly been emerging as a more high-profile player, especially internationally–who found inspiration in the past.

To understand why, you’ll first need a short and truncated history lesson, which I culled from a variety of sources online and off:

Taking place in September 52 BC in what is now France, the Siege of Alesia (also referred to as the Battle of Alesia) pitted Rome’s famed leader, Julius Caesar, against the Gallic tribes under the unified command of Vercingétorix of Averni.

More important–besides being cited as one of the best uses of siege warfare and “circumvallation” (see more about this below)–the battle of Alesia is considered a turning point in the bitter wars conducted by the Roman Republic to tame the Gauls, who had finally united as a single force in opposition to the Roman invasion.

The hard-fought win–in a battle where the Roman army was outnumbered five-to-one, outside a hilltop fort in Alesia–is often credited with reinvigorating Rome’s power over Gaul. After the loss, Gaul became a province of the Roman empire and was pretty much subdued for the next 500 years.

Alesia is often cited as one of Caesar’s greatest military victories and the fallout from it later led to his ascension to ultimate power in Rome (which was soon followed by his infamous assassination).

That’s not the ultimate end News Corp. is envisioning, of course, sticking with Alesia’s main themes of “perseverance” and innovation, said several people with knowledge of the digital content efforts.

And, no surprise, in the digital battles between traditional media and interlopers from the Web, guess who has been cast as noble Caesar and who plays the role of marauding heathens?

You know, the ones who even cast their women and children out of the fort into the middle of the siege when food started to run out? That would apparently be the Googlers of Silicon Valley, although if it were them, the food would be organic!

Not all comparisons are the same, said a source. For example, consider circumvallation, which is essentially the building of a series of encircling fortified walls around the enemy. Contravallation is also also part of the strategy, to protect from attacks by enemy reinforcements attacking from the outside.

One could easily imagine that this means creating pay walls around premium content or de-indexing it from search sites like Google, both of which News Corp. has publicly talked about doing.

Not so!

“Traditional media companies are interested in investing in innovation too, so the idea of just putting up walls around content is a red herring,” said the source. “The idea is to find new ways of distributing media that also makes money, because why should journalism in [digital] ones and zeros be any different?”

Of course, with new stats showing sites like Google News and Yahoo (YHOO) News as the place consumers are going to get more and more of their news, that is a big issue in a longer fight, which will grind on for a very long time and well before any side can ever declare victory.

And here is a clip from a 2001 movie, “Vercingétorix,” about the Siege of Alesia, not made by News Corp.’s 20th Century Fox Hollywood studio, starring that actor dude from “Highlander” (aka my fave movie of all time). It does not end well for Google, oops, the Gauls:

[The 1899 painting at the top is by Lionel-Noël Royer.]

A Very Short List: Publishers That Have Actually Told Google to Take a Hike

Peter Kafka — Mon, 21 Dec 2009 16:08:00 +0000

Publishers love to gripe about Google. But they almost never, ever, do the one thing that could put their money where their mouth is: Tell the search giant to leave them out of its results.

If you follow the media-versus-Google meme, you know this instinctively. But here are some numbers that spell it out: Of the 25,000-plus sources cataloged by Google News, “less than 100″ have opted out of the index, says Google’s Josh Cohen, who runs the service.

It is theoretically possible, of course, that more publications have opted out of Google’s main search results than out of the narrower Google News product. But I doubt it.

I also doubt that we’re going to see a significant number of publishers opt out of Google (GOOG) in the future, despite noisy saber-rattling from media outlets–most notably the Associated Press and News Corp. (NWS), which owns this site.

That said, if we are going to see some movement, it will be in the next few months. The AP, for instance, has a licensing deal with Google that runs out in the very near future.

I chatted Friday with Cohen (see video interview below) about the negotiations, and he gave me the polite equivalent of a “no comment.” But from what I can tell, the two sides remain pretty far apart on just about every point of contention.

Some other items of note from my conversation with Cohen:

A reminder that even publishers that put their stuff behind a paywall don’t want to cut themselves off from Google, which is absolutely true. Just ask News Corp.’s Wall Street Journal, which has gone through considerable effort and expense to boost its presence in search results.
Even though Google is already integrating “real-time” search results from Twitter (with Facebook and MySpace on the way), those results have not worked their way into Google News, and Cohen and his team are still trying to figure out the best way to do that.
I got an English-language explanation of the “Living Stories” project Google is working on with the Washington Post (WPO) and the New York Times (NYT).

Apologies: I still have not mastered vagaries of audio for Web video, or at least for our Web video publishing system. You’re probably going to want to turn the volume down during the introduction in this clip and then turn it back up once the interview starts.

[ See post to watch video ]

Will Google's Goodwill Campaign Appease Publishers?

Peter Kafka — Wed, 09 Dec 2009 15:10:32 +0000

Here’s how the battle between Google and the news business is playing out: Big publishers, including the Associated Press and News Corp. (NWS), huff and puff loudly about the way the search giant treats them. They threaten to take their ball and go home, but they don’t actually do it.

And Google (GOOG) shrugs and says it can’t understand what the publishing guys are complaining about it, but goes ahead and makes goodwill gestures anyway.

By my count we’re up to three such gestures in the last nine days:

Dec 1: Google changes its “First Click Free” program, making it easier for news sites to wall off access to their premium stuff–or harder for users to game the sites, if you want to think of it that way.
Dec. 2: Google makes it easier for publishers to delist themselves from Google News.
Dec. 8: Google launches a “Living Stories” experiment with the New York Times (NYT) and the Washington Post (WPO), which offers a new way to sort and read the papers’ stories. If it makes sense to you, let me know.

None of the above has anything to do with the publishers’ main complaint, which is that Google is simultaneously profiting from and devaluing their product. But it does allow Google to say that it’s listening to, and even working with, publishers.

Google could appease publishers simply by cutting them bigger checks, but that’s a slippery slope the search giant is trying to avoid. And the biggest publishers could put more oomph behind their argument if they really did cut themselves off from the search giant’s index. But tellingly, none of them have actually done this to date.

So I think we’re going to be stuck here for some time.

BoomTown Decodes Google CEO Schmidt's Shut-Up-You-Whiny-News-Folk Op-Ed (So You Don't Have To)!

Kara Swisher — Thu, 03 Dec 2009 21:30:47 +0000

Please see this disclosure related to me and Google.

Google CEO Eric Schmidt did one of his patented throat-clearers in an opinion piece in The Wall Street Journal today and it pretty much begs for translation.

Well, BoomTown shall not tarry from the task of decoding the extra-long rumination from the head of Google (GOOG), who was responding to the recent spate of aggressive attacks by traditional media publishers.

They have blamed the search giant for everything from their current business woes to the destruction of journalism to Tiger Woods’s dicey marital troubles.

Okay, not that! But the rest for sure.

First and foremost among the attackers has been Rupert Murdoch, CEO and ruler-of-all-he-surveys at News Corp. (NWS), which owns The Wall Street Journal and this Web site.

How ironic, yet still typically cozy from a corporate bigwig point of view! I call you a cur in public, but please use my newspaper so that I can get some decent traffic from this wrestling match.

But all is not what it seems in the Schmidt piece, of course, so here’s the translation:

What Schmidt wrote: How Google Can Help Newspapers

Video didn’t kill the radio star, and the Internet won’t destroy news organizations. It will foster a new, digital business model.

By ERIC SCHMIDT

Translation: We come in peace, always. You know, like the freakily calm lady from “V,” who is really a lizard under all that pretty and is actually secretly trying to decide between grilling and broiling all you whiny news people.

Also, you can address me in the future as Emperor Palpatine.

What Schmidt wrote: It’s the year 2015. The compact device in my hand delivers me the world, one news story at a time. I flip through my favorite papers and magazines, the images as crisp as in print, without a maddening wait for each page to load.

Even better, the device knows who I am, what I like, and what I have already read. So while I get all the news and comment, I also see stories tailored for my interests. I zip through a health story in The Wall Street Journal and a piece about Iraq from Egypt’s Al Gomhuria, translated automatically from Arabic to English. I tap my finger on the screen, telling the computer brains underneath it got this suggestion right.

Some of these stories are part of a monthly subscription package. Some, where the free preview sucks me in, cost a few pennies billed to my account. Others are available at no charge, paid for by advertising. But these ads are not static pitches for products I’d never use. Like the news I am reading, the ads are tailored just for me. Advertisers are willing to shell out a lot of money for this targeting.

Translation: It’s the year 2015 in the United States of Google, where the new country colors are a festive green, blue, red and yellow.

As per the new Declaration of Googlependence, besides the tracking chip in your thighs, every citizen will be outfitted with a tablet running Chrome and looking suspiciously like a large iPhone, except that Apple (AAPL) was outlawed in the Fanboy Purge of 2010.

Every day, citizens will receive news specially aimed at them, such as “The Health Benefits of Sergey Worship.” Ads will also be tailored to citizens’ likes and dislikes, such as a pitch for Googley deodorant with the motto: “Search me, because I smell nice!”

Costs will be billed to your accounts at the National Bank of Google.

What Schmidt wrote: This is a long way from where we are today. The current technology–in this case the distinguished newspaper you are now reading–may be relatively old, but it is a model of simplicity and speed compared with the online news experience today. I can flip through pages much faster in the physical edition of the Journal than I can on the Web. And every time I return to a site, I am treated as a stranger.

So when I think about the current crisis in the print industry, this is where I begin–a traditional technology struggling to adapt to a new, disruptive world. It is a familiar story: It was the arrival of radio and television that started the decline of newspaper circulation. Afternoon newspapers were the first casualties. Then the advent of 24-hour news transformed what was in the morning papers literally into old news.

Translation: [Rachel: Please insert usual pap boilerplate here damning the newspaper business with faint praise. History of how change hurts, but is inevitable...blah, blah, blah. Please make sure to deliver a few digs too, like how--unlike Google--newspapers have no idea what their readers did last summer. Like we do. Cue evil Mwahahahaha laugh here.]

What Schmidt wrote: Now the Internet has broken down the entire news package with articles read individually, reached from a blog or search engine, and abandoned if there is no good reason to hang around once the story is finished. It’s what we have come to call internally the atomic unit of consumption.

Translation: “Atomic unit of consumption” is one of those terms we don’t expect you small-brained people to even begin to understand. Although you use only eight percent of your mental capacity, we here at Google use an average of 71 percent, tracking on our search share.

What Schmidt wrote: Painful as this is to newspapers and magazines, the pressures on their ad revenue from the Internet is causing even greater damage. The choice facing advertisers targeting consumers in San Francisco was once between an ad in the Chronicle or Examiner. Then came Craigslist, making it possible to get local classifieds for free, followed by Ebay and specialist Web sites. Now search engines like Google connect advertisers directly with consumers looking for what they sell.

Translation: I also don’t expect you Luddites will get this, but all your base are belong to us.

For those who need an older cultural reference, it is like the end of “Butch Cassidy and the Sundance Kid.” Um, as much as you Hollywood types like a happy ending, Butch and the Kid did not make it.

What Schmidt wrote: With dwindling revenue and diminished resources, frustrated newspaper executives are looking for someone to blame. Much of their anger is currently directed at Google, whom many executives view as getting all the benefit from the business relationship without giving much in return. The facts, I believe, suggest otherwise.

Google is a great source of promotion. We send online news publishers a billion clicks a month from Google News and more than three billion extra visits from our other services, such as Web Search and iGoogle. That is 100,000 opportunities a minute to win loyal readers and generate revenue–for free. In terms of copyright, another bone of contention, we only show a headline and a couple of lines from each story. If readers want to read on they have to click through to the newspaper’s Web site. (The exception are stories we host through a licensing agreement with news services.) And if they wish, publishers can remove their content from our search index, or from Google News.

Translation: Shut your overstuffed pie holes, you grumbling antiques. You were dying by the cell long before our superior technology arrived to save the day and help you out of your sorry mess.

Plus, we toss you all that traffic and you still manage to fumble our perfect pass like the pikers you are. (In truth, you are Charlie Brown and we are Lucy.)

Also, have you ever heard of “fair use”? It’s the law now and we can hire more lobbyists in Washington, D.C., than you with the bazillions and gamillions of dollars we make from all those tiny little blue links.

You do realize I have a key to the the White House and visit more times than Joe Biden?

What Eric wrote: The claim that we’re making big profits on the back of newspapers also misrepresents the reality. In search, we make our money primarily from advertisements for products. Someone types in digital camera and gets ads for digital cameras. A typical news search–for Afghanistan, say–may generate few if any ads. The revenue generated from the ads shown alongside news search queries is a tiny fraction of our search revenue.

Translation: Here’s an easy formula for you to grok: Michael Jackson+the pretty boy from “Twilight”+digital cameras=Big bucks for Google! Some thumbsucker you did on Afghanistan, however worthy and important for our nation’s future=14 cent CPM, but only if a drunken Lindsay Lohan story is in close proximity.

What Schmidt wrote: It’s understandable to look to find someone else to blame. But as Rupert Murdoch has said, it is complacency caused by past monopolies, not technology, that has been the real threat to the news industry.

Translation: [Rachel: Please insert Rupe quote that actually hangs him here.]

What Schmidt wrote: We recognize, however, that a crisis for news-gathering is not just a crisis for the newspaper industry. The flow of accurate information, diverse views and proper analysis is critical for a functioning democracy. We also acknowledge that it has been difficult for newspapers to make money from their online content. But just as there is no single cause of the industry’s current problems, there is no single solution. We want to work with publishers to help them build bigger audiences, better engage readers, and make more money.

Meeting that challenge will mean using technology to develop new ways to reach readers and keep them engaged for longer, as well as new ways to raise revenue combining free and paid access. I believe it also requires a change of tone in the debate, a recognition that we all have to work together to fulfill the promise of journalism in the digital age.

Translation: Really–we’re from Google and we’re here to help! Mwahahahahaha.

Seriously, you guys, please go back to demonizing Microsoft (MSFT) or those banker salaries or the health care bill.

While my gabillions of dollars are more than protecting me from the blows you are trying to land, I am not liking the hairy eyeballs I got at the Allen & Co. conference at Sun Valley last summer. I think Washington Post head Don Graham even short-sheeted my 600-thread count Frette bedding there.

What Schmidt wrote: Google is serious about playing its part. We are already testing, with more than three dozen major partners from the news industry, a service called Google Fast Flip. The theory–which seems to work in practice–is that if we make it easier to read articles, people will read more of them. Our news partners will receive the majority of the revenue generated by the display ads shown beside stories.

Translation: [Rachel: Please insert some kooky-named Google 20 percent project we have no intention of really going large on here, so they think we really are working on something to save them. Those media folks like Hail Mary tech solutions, even if they don't even know how to turn them on.]

What Schmidt wrote: Nor is there a choice, as some newspapers seem to think, between charging for access to their online content or keeping links to their articles in Google News and Google Search. They can do both.

Translation: You de-indexin’ me? You de-indexin’ me? You de-indexin’ me? Then who the hell else are you de-indexin’? You de-indexin’ me? Well I’m the only one here. Who the %*#! do you think you’re de-indexin’?”

What Schmidt wrote: This is a start. But together we can go much further toward that fantasy news gadget I outlined at the start. The acceleration in mobile phone sophistication and ownership offers tremendous potential. As more of these phones become connected to the Internet, they are becoming reading devices, delivering stories, business reviews and ads. These phones know where you are and can provide geographically relevant information. There will be more news, more comment, more opportunities for debate in the future, not less.

The best newspapers have always held up a mirror to their communities. Now they can offer a digital place for their readers to congregate and talk. And just as we have seen different models of payment for TV as choice has increased and new providers have become involved, I believe we will see the same with news. We could easily see free access for mass-market content funded from advertising alongside the equivalent of subscription and pay-for-view for material with a niche readership.

Translation: Smartphones are the answer! Sure! Your aging demo loves reading teeny-weeny writing on a device they want to throw against a wall.

Or maybe you can be like HBO! Except you’ll need more borderline porn and Mafia guys.

What Schmidt wrote: I certainly don’t believe that the Internet will mean the death of news. Through innovation and technology, it can endure with newfound profitability and vitality. Video didn’t kill the radio star. It created a whole new additional industry.

Translation: A census taker once tried to test me. I ate his liver with some fava beans and a nice chianti.

Does Your Mom Edit Your Blog? Google Wants to Know.

Peter Kafka — Thu, 05 Nov 2009 17:30:56 +0000

Do a Google news search, for say, “Will Ferrell,” and you’ll see that the search giant has started labeling news items from blogs as…news items from blogs. Why?

Turns out Google (GOOG) CEO Eric Schmidt isn’t quite sure himself.

But posed with that question during a Boston news conference yesterday, Schmidt did use the opportunity to expound on the difference between pro bloggers and amateur ones. Or at least, his vision of the difference.

From Nieman Journalism Lab blogger Zachary Seward’s transcript of his exchange with Schmidt:

Me: A very small question. Google News very recently added a label for blogs, to differentiate from non-blogs. It seemed weird in 2009 to make that distinction. I wondered, did you have any input on that or –?

Eric Schmidt: I was not directly involved in that. There seems to be a difference between blogs and traditional news. It’s sometimes hard to distinguish because many people in the traditional news are also bloggers.

Me: Or they use a blog platform.

Schmidt: Or they use a blog platform. So we’re trying to find that line. And it’s hard to articulate what that difference is.

Me: How would describe that line if it’s not based on the tech behind the publishing platform?

Schmidt: No, it’s not the technology. My guess is–again, I’m speculating, which is always a mistake–it has a lot to do with the infrastructure around the writer. So a blog that’s associated with a major, legitimate organization–of which, I think, the majority, if not everyone, in the room is associated with–would be, I think, treated differently than an individual blogger who’s using his or her right of free expression to say whatever he thinks. So the presence of an editor, as an example. You know, an editor that’s not your mom.

As Seward points out, Schmidt is wrong about the way Google News categorizes. As best I can tell, Google basically lumps all blogs, including this one, which I like to think of as reasonably professional, in its “blog” category. And no, despite her occasional appearances on this site, Kara Swisher’s mother is not an editor here.

Anyway, the real question for me isn’t “how does Google refer to my work in its search results?” but “how does Google determine where to put my my work in its search results?” Schmidt and company can call it whatever they want–just send those eyeballs my way.

[image credit: kevindooley]

Sun Valley Diary: Where's the New York Times's Sun Valley Diary?

Peter Kafka — Wed, 08 Jul 2009 16:31:49 +0000

Every year, media moguls gather at the Allen & Co. Sun Valley conference to listen to each other gab, parade around in casual wear and occasionally make deals.

And for the last several years, the New York Times (NYT) has provided excellent on-the-ground coverage, usually via Dealbook’s Andrew Ross Sorkin.

Not this year.

Reporters and media chieftains alike started arriving at the Idaho resort last night, but the Times is AWOL. If you want first-hand reportage on who said what outside the bar or by the duck pond, you’re going to have to rely on other news outlets.

Sorkin explained his absence via email to me:

For better or worse, I couldn’t make it out to Sun Valley this year because I’m chained to my desk for the next couple of weeks trying to finish my upcoming book, “Too Big to Fail.”

Given the market jitters–and resulting deal drought–we made the decision to cover the event from afar this year. I’m trying to stay up to date on the latest machinations out there by speaking with a half dozen of the invitees daily by phone and email–some of whom have already tapped out notes by Blackberry from inside this morning. (We actually might have a pretty interesting Sun Vally story up on DealBook in the next 24 hours.) We’re also running a series of Twitter feeds from other news organizations on DealBook’s homepage. And we plan to run several Sun Valley photo slide shows, as we’ve done in year’s past.

In truth, it’s debatable whether any news outlet has to be at Sun Valley: Some of the moguls use the opportunity to hold briefings with the press there. Google’s Eric Schmidt (GOOG) has been particularly talkative in years past. But anything truly important generally happens away from the scribes and usually comes to light well after the fact, so you could argue that real-time coverage is overrated.

On the other hand, last year Rupert Murdoch, who owns this Web site, enlisted the help of the press corps to help him find his wedding ring after an evening at the bar. That was a pretty great story.

And in any case, there are still plenty of other outlets on the ground. Among them: The Financial Times, Reuters, Bloomberg, the Los Angeles Times, CNBC, the New York Post, and our colleague Julia Angwin from The Wall Street Journal.

A quick perusal of Google News will keep you up to date, and if you want second-by-second stuff, there’s a Twitter stream, of course. And sure enough, Sorkin’s Dealbook has a nifty widget that lets you toggle between different Twitter feeds. It’s worth checking out.

The Great Michael Jackson Web Collapse Downgraded to "Stumble"

Peter Kafka — Mon, 29 Jun 2009 17:12:38 +0000

We’ve previously noted that the Web is great at transmitting information quickly, though not always accurately. Same goes, apparently, for stories about the Web’s ability to transmit information quickly.

After Michael Jackson died on Thursday, we saw a rash of stories about the Internet’s inability to handle the crush of traffic the news event generated. Many of those stories cited the same source to illustrate the problem: A report Web performance consultants Keynote Systems (KEYN) issued that day that said Time Warner’s (TWX) AOL, Disney’s (DIS) ABC and CBS (CBS), among others, experienced “marked slowdowns in performance.”

I found that a little bit surprising since my desultory and highly unscientific survey of the Web found that most sites were working pretty well as the news broke Thursday afternoon. And to its credit, Keynote’s report never said the sites failed. Instead, it said average downloading times at news sites doubled, to nearly nine seconds, and that “average availability of sites” went from 100 percent to 86 percent.

But even those nondeaths were greatly exaggerated, Keynote now says. In a report issued late Friday, the service says that its analytics were measuring the wrong thing on Thursday. The news sites themselves performed OK, but the third-party networks serving ads frequently failed to keep up. Oh, and the two-hour failure it reported at ABCNews.com never happened.

To be sure, some individual Web sites and services did trip a bit when confronted with a rush of Jackson traffic. But I’ve yet to hear of a service that completely went down. Google News (GOOG) gave some users an error message for 45 minutes, but the main search service still seemed to function. AOL’s AIM went down, but not the rest of the site. Twitter got slower but still stayed up. Etc.

Even more comforting: I have yet to hear of the Web’s infrastructure itself buckling under traffic. Anyone have any evidence to the contrary? Let me know.

[Image credit: University of Washington Librarires via pri.studio360]

Google Mistakes Michael Jackson's Death for an "Automated Attack"

Peter Kafka — Sat, 27 Jun 2009 00:48:23 +0000

One last Michael Jackson Web traffic story: Google says it received so many search queries with the late singer’s name on Thursday that it thought it was being targeted by an “automated attack.” Which meant that some visitors looking for Jackson info on Google News got an error message for about 25 minutes yesterday.

Google also offers up this graph, below (click to enlarge), to give you a sense of the traffic spike it got from Jackson-searchers. It’s impressive, but without metrics it’s sort of hard to gauge what it really means–just like the chart that Google (GOOG) provided about query volume during Barack Obama’s inauguration.

Google Outage Caused by Asian "Traffic Jam"

John Paczkowski — Thu, 14 May 2009 19:23:56 +0000

If the Web has a single point of failure, you’d think it was Google, given the outcry over the the outages suffered by some of the company’s services Thursday. Something went wrong this morning and whatever it was had widespread effects on a broad spectrum of Google services–Google Search, Gmail, YouTube, Google News, Blogger, Google Analytics, Google Docs. It outraged Twitter users and provided Microsoft’s (MSFT) Live Search team with no end of amusement. “Sympathies to the Google servers. Happens to everyone. But this is why the world needs more than one search engine,” it quipped in a tweet.

The source of the disruption? A system error that sent a bunch of Google (GOOG) Web traffic to Asia and waylaid about 14 percent of it, apparently.

This just in from the Google Blog:

“Imagine if you were trying to fly from New York to San Francisco, but your plane was routed through an airport in Asia. And a bunch of other planes were sent that way too, so your flight was backed up and your journey took much longer than expected. That’s basically what happened to some of our users today for about an hour, starting at 7:48 am Pacific time.

An error in one of our systems caused us to direct some of our web traffic through Asia, which created a traffic jam. As a result, about 14% of our users experienced slow services or even interruptions. We’ve been working hard to make our services ultrafast and ‘always on,’ so it’s especially embarrassing when a glitch like this one happens. We’re very sorry that it happened, and you can be sure that we’ll be working even harder to make sure that a similar problem won’t happen again. All planes are back on schedule now.”

Google Outage Caused by Asian "Traffic Jam"

John Paczkowski — Thu, 14 May 2009 19:23:56 +0000

The source of the disruption? A system error that sent a bunch of Google (GOOG) Web traffic to Asia and waylaid about 14 percent of it, apparently.

This just in from the Google Blog:

“Imagine if you were trying to fly from New York to San Francisco, but your plane was routed through an airport in Asia. And a bunch of other planes were sent that way too, so your flight was backed up and your journey took much longer than expected. That’s basically what happened to some of our users today for about an hour, starting at 7:48 am Pacific time.

An error in one of our systems caused us to direct some of our web traffic through Asia, which created a traffic jam. As a result, about 14% of our users experienced slow services or even interruptions. We’ve been working hard to make our services ultrafast and ‘always on,’ so it’s especially embarrassing when a glitch like this one happens. We’re very sorry that it happened, and you can be sure that we’ll be working even harder to make sure that a similar problem won’t happen again. All planes are back on schedule now.”

LIVE: Google Press Luncheon

John Paczkowski — Thu, 07 May 2009 20:39:36 +0000

In advance of its shareholder meeting today, Google is holding a press event at its Mountain View, Calif., campus with CEO Eric Schmidt presiding. Also on hand: Dave Drummond, senior vice president of corporate development; Susan Wojcicki, vice president for product management, Kent Walker, general counsel, and Marissa Mayer, vice president, search products and user experience.

Hot topics of the day: Google’s and Apple’s interlocking boards, YouTube and the company’s thoughts on the econalypse, AOL and netbooks.

This liveblog paraphrases most questions and answers. It is not, in other words, a verbatim transcript of the event.

A theme of the meeting is the just-opened inquiry by the Federal Trade Commission into Apple’s and Google’s interlocking boards. Schmidt gets right into the topic with a joke: Looks like we’re at a legal deposition. He adds that he doesn’t believe Google (GOOG) views Apple (AAPL) as a primary competitor. If there are issues that are competitive during a board meeting, he will recuse himself, he says, just as he has regarding the iPhone.

Would Schmidt consider resigning from the Apple board?

Schmidt: “Hasn’t crossed my mind.” Ken Walker adds: “The law is clear that there is safe harbor for companies that don’t have overlapping revenues, and we’re comfortable with that position.”

Regarding the recession, are there any signs that we’re at the bottom?

Schmidt: “We don’t yet see a change.”

As Google gets bigger and faces more antitrust scrutiny, does this change how the company approaches partnerships?

Schmidt: Information is incredibly important, and we should expect governments around the world to pay attention to what we do and hold us to the principles we’ve articulated. Internally we tell our employees to pay attention, there are consequences to mistakes they make.

In the last few years, we’ve worked harder to anticipate the concerns of people affected by the power of the Internet. In my biased judgment, we’re getting better at anticipating those concerns.

We are more careful about when and how we do things that are raising the concerns of any party, but that care doesn’t stop us from doing those things.

Is there anything you haven’t done because of that?

Schmidt: I can’t think of a specific.

What do you think of the long-time monetization potential of social networks?

Susan Wojcicki: “We’ve been learning a lot about monetizing social inventory. And we believe there are ways to monetizie it over time, but those ways are different from search.”

Why did Google decide to sell its stake in AOL?

Schmidt: “We love AOL….We also like money… and look, we sent our best guy over there to run it,” he says referring to Tim Armstrong who recently left Google for AOL.

When will YouTube be profitable?

Schmidt: YouTube will eventually be a successful product and business. We don’t know how long that will take. But YouTube is a huge traffic phenomenon. (Wojicki jumps in to note that that traffic is attracting a lot of advertiser interest, so there is monetization going on. She adds that Google is adding new ad formats to the site, prerolls and click-to-buy ads on music videos.)

How does Google continue innovating given the cost-cutting measures it recently implemented?

Schmidt Innovation is a cultural value at Google, so this hasn’t really been an issue. Cutbacks were more efficiency-related, a move to stay lean but nimble in the midst of a recession.

What’s your take on the balance between Android being an open platform and the trade-offs the company needs to make with handset makers?

Schmidt: “On the one hand, you benefit by having free access; on the other hand there is some sacrifice of stability. We are doing our best to achieve stability without exercising too much control.”

What about China?

Dave Drummond: It’s an “ongoing challenge” to operate there. YouTube is blocked. There is a government preference for local business that makes things very difficult. That said, “we think we’re doing well there.”

Schmidt: “We will continue to do business in China….We would like YouTube unblocked.”

How do you respond to critics who argue that Google is the new Microsoft (MSFT)?

Schmidt: “They obviously don’t remember the old Microsoft.”

In recent public forums you’ve been asked about acquisitions and you’ve said the price isn’t right right now. Has there been any change in that opinion?

Schmidt: No change. There’s simply just not a lot of activity out there now.

What are your thoughts on netbooks?

Schmidt: “The netbook phenomenon looks very real. It looks like it will be a significant element of growth in the PC industry over the next few years.” Schmidt further notes that Google is obviously interested in the market given its business. “Watch the space,” he concludes.

Google Launches Service Experiments

Jessica E. Vascellaro — Tue, 21 Apr 2009 12:01:39 +0000

Google (GOOG), which been pruning some early-stage products amid slower growth and the downturn, introduced two experiments Monday: a service that displays news search results in a chronological timeline and a way to find more relevant images.

The first of the two, called Google News Timeline, presents the globs of content already in Google News–including articles, blogs, photos, scanned newspapers, magazine covers and more–in a draggable timeline. Users who search for a topic like the Iraq War will see a history of articles, photos and videos arranged by date, week or month and can scroll through them quickly with their mouse. Users can refine their search to specific sorts of news, like newspapers or blogs, and search some non-news sources like Wikipedia or movies.

Read the rest of this post at the original site

Ads in Google News? Cue Newspaper Industry Outcry in 3… 2… 1

John Paczkowski — Thu, 26 Feb 2009 17:13:18 +0000

When [Google CEO] Eric Schmidt says he worries about the newspaper industry, it’s crocodile tears.

– Brian Tierney, chief executive of Philadelphia Media Holdings, which own The Philadelphia Inquirer and The Philadelphia Daily News

Leave it to Google to find a bit of meat on the revenue-starved bones of the newspaper industry. On Wednesday, the company extended its AdWords program to Google News, serving up text ads alongside news searches in much the same way it does regular Google searches. Search for news about, say, mesothelioma, and you’ll be shown the broad spectrum of ads touting mesothelioma legal services (click on image below).

Google (GOOG) announced the move in a post to its official blog:

In recent months we’ve been experimenting with a variety of different formats, like overlay ads on embedded videos from partners like the AP. We’ve always said that we’d unveil these changes when we could offer a good experience for our users, publishers and advertisers alike, and we’ll continue to look at ways to deliver ads that are relevant for users and good for publishers, too.”

The addition of AdWords to Google News was inevitable as the economy continues to weaken and Google looks to expand its revenue streams. But so too may be the outcry over the move. In 2006, the World Association of Newspapers demanded that Google News stop indexing its member sites on the grounds that Google was profiting from the use of their copyright material. Agence France-Presse sued Google for the same thing in 2005. At the time, Google News carried no advertisements and hence, no obvious revenue stream. What will they, and other members of the fast-deteriorating newspaper industry say now that it does? As Searchblog’s John Battelle quips, “This one will kick up some dust.”

Google to World Association of Newspapers: Sure Your Acronym's Not 'WAAAGH!'?

John Paczkowski — Tue, 16 Sep 2008 13:44:54 +0000

Google Chief Legal Officer David Drummond says the company’s proposed search advertising partnership with Yahoo won’t increase Google’s share of search traffic. But no one appears to be taking him at his word.

The World Association of Newspapers said Monday that it opposes the deal, adding its name to a growing list of critics that now includes not just Microsoft, but the Association of National Advertisers and European Union as well. Late Monday, WAN, which represents 76 national newspaper associations and more than 18,000 publications on five continents, issued a statement condemning the Google-Yahoo deal as disastrous for the newspaper industry. Surprisingly hostile in tone, it argues that the proposed advertising alliance between Google (GOOG) and Yahoo (YHOO) will weaken competition in the online advertising space and solidify Google’s dominance in search at a time when the company is expanding its own content businesses:

The upshot is that the deal will force newspapers to become even more dependent on Google than they are today. By handing Google control of up to 90 percent of paid search and content advertising, Google will exert tremendous power over both newspapers’ ability to reach readers and their ability to generate online advertising revenue. Perhaps never in the history of newspaper publishing has a single, commercial entity threatened to exert this much control over the destiny of the press.

It is particularly worrisome that this consolidation of power is occurring at the same time that Google increasingly takes positions that are adverse to newspapers and other content creators. Google already owns several content sites that directly compete with content developed by newspapers and other creators–often by simply copying others’ content without authorization. Usually, Google alone profits from this misappropriation. Take, for example, the case of Google News, which a Google senior executive recently admitted drives $100 million in advertising revenue to Google itself yet provides nothing–not a penny–to the newspaper companies whose works appear on those pages.

Clearly, newspapers have quite a few axes to grind with Google, and WAN appears intent on grinding them all at once. That said, Google’s partnership with Yahoo would be limited to the United States and Canada, so the protestations of a group of international newspapers may not carry as much weight with the regulators reviewing the deal as WAN would like. Especially after the U.S.-based Newspaper Association of America so quickly distanced itself from them. Said NAA CEO John F. Sturm, “While NAA is a member of the World Association of Newspapers, I would like to clarify that the NAA Board of Directors has taken no position on the proposed advertising partnership between Google and Yahoo.”

Google to World Association of Newspapers: Sure Your Acronym's Not 'WAAAGH!'?

John Paczkowski — Tue, 16 Sep 2008 13:44:54 +0000

There Goes the Neighboorhood …

John Paczkowski — Thu, 07 Feb 2008 20:54:00 +0000

On the great list of words no tech executive ever wants to hear, “Google has entered your market” ranks right up there with “Microsoft’s made a hostile bid for the company” and “Hello, I’m Chris Hansen with ‘Dateline NBC: To Catch a Predator’.” So local news aggregators like Topix and EveryBlock can be forgiven for blanching a bit when Google announced the addition of geo-local search to Google News this morning.

“Today we’re releasing a new feature to find your local news by simply typing in a city name or zip code,” Google software engineers Andre Rohe and Rohit Ananthakrishna wrote in a post to the official company blog. “While we’re not the first news site to aggregate local news, we’re doing it a bit differently–we’re able to create a local section for any city, state or country in the world and include thousands of sources. We’re not simply looking at the byline or the source, but instead we analyze every word in every story to understand what location the news is about and where the source is located.”

Location-based news targeting. Pretty slick. Or it will be, once they get the 90210 bug worked out. Still, as Topix co-founder Rich Skrenta notes, Google’s a little late to this particular game. “This was pretty neat stuff when Topix launched in January 2004,” Skrenta quips. “Now if Google just added 50,000 vetted local blogs to the mix, and a community with 100K posts/day, they’ll have something.”

More on Bill Keller's Blog-Bashing and BoomTown's Bill-Bashing

Kara Swisher — Thu, 06 Dec 2007 08:05:49 +0000

Earlier this week, I ranted on about a rant made by New York Times Executive Editor Bill Keller.

Readers had a lot of thoughtful reactions.

To recap: Keller (pictured here) had taken wobbly aim at the Web and its bloggers, calling the Internet a “media tsunami” and too much of its fare “unreliable,” such as sites like Wikipedia and Google News.

“Most of the blog world does not even attempt to report. It recycles. It riffs on the news,” he said in a speech he recently gave in London, in that tiresome tsk-tsk way that must be in the mainstream media mandarin handbook. “That’s not bad. It’s just not enough. Not nearly enough.”

BoomTown, of course, disagreed. I wrote: “This is simply not true going forward, and he should have done some reporting on the subject to find out. There is an ever-increasing number of online outlets who are doing most excellent online reporting.”

Readers weighed in.

Wrote Abe Maslow:

That’s an interesting dodge you’re attempting to pull over on us, when you say, ‘This is simply not true going forward…’ What service does that usually useless bit of business jargon mean here?

“And what’s your evidence: You know of an ever-increasing number of bloggers who do reporting. How in the world would that rebut Keller’s point that most (not all, but most) bloggers do no reporting, choosing instead to comment?”

Obviously, I should have removed that caveat of going forward, but I was being polite! I suppose Keller is technically right on most, but it’s really changing fast and seems simply myopic on his part.

First, he has a bunch of great bloggers who report at his newspaper. Too many to list. We have a bunch at Dow Jones, as do all major newspapers, networks and magazines. While those might be considered reporters, they are more than that and relatively new.

In tech and media alone, besides, there are scads who are doing great reporting and analysis and scooping all those newspapers frequently: Om Malik, Rafat Ali, Jeff Jarvis, Nikki Finke, Peter Kafka, Erick Schonfeld, Staci Kramer, Mark Glaser, Matt Marshall, Chris Anderson, Ryan Block, Brian Lam, Nick Carr. I could go on in this and every category–food, travel, gossip, local, all kinds of business.

Still, noted Glenn Kelman:

In this sense, it seems unfair to brand Keller a dinosaur for drawing an accurate distinction about blogging and traditional journalism. Would we have blamed Keller for making the same observation about cable’s sumo pundits?

“I also think your argument ignores a distinction Keller would undoubtedly make, between professional journalists and citizen journalists. We all know it doesn’t matter whether the news is delivered in print, via the Web, or via RSS; a professional journalist like you who breaks news via a blog isn’t whom Keller is talking about.”

Maybe so, but I guess I have to reiterate that I am weary hearing that same old tired tune about how bad blogs are comparatively, since it is increasingly and swiftly not true.

And why beat up on citizen journalists anyway? They are surely additive and often sharper than the so-called professionals.

Maybe Keller is not a dinosaur, but his speech struck me as not exactly forward-looking and, to my mind, the executive editor of the New York Times needs to be that these days.

In fact, I am with Tish Grier, who wrote:

It would be very nice if guys like Keller would come down to where the people are and start talking with the diversity of us–rather than lumping us all under some kind of crazy rubric that fits his particular argument.

“If he listened, he might find out why so many of us blog in the first place; why so many of us really aren’t out to ‘kill’ journalism. He might find that some of us only want to bring in a different perspective to stale discussions that seem to be perpetuated by old windbags (read: columnists).”

As a formerly print-only windbag, now freshly blowing online, I could not agree more.